The news of balance sheet mayhem gets even worse with the prudent Swiss at UBS announcing plans for a fresh 15 billion Swiss francs capital hike, fully underwritten by four leading international banks (JPMorgan, Morgan Stanley, BNP Paribas and Goldman Sachs)- the last day they can before the legal deadline for the bank to send out the AGM invitation along with the order of business for the day. This will strengthen Tier 1 capital. This will involve Rights issue of 1,250,000,000 fully paid registered shares with a par value of CHF 0.10 each (Mkt price now, CHF 28.86 US$ 28.80).
The need for this capital injection was triggered by further US$19 billion writedowns on US real estate and related structured credit positions, which according to the Swiss banking giant will in a first quarter net loss of approximately 12 billion Swiss francs.(US$12 Bn.) UBS say they "substantially reduced their real estate related positions through both valuation adjustments and significant disposals". Over the first quarter, UBS's exposure to US residential sub-prime mortgage related positions declined to approximately USD 15 billion from USD 27.6 billion on 31 December, and the exposure to Alt-A positions was reduced from USD 26.6 billion to approximately USD 16 billion.
The US $19bn of fresh asset writedowns has to be added to US $18.4bn it wrote off in 2007, as the value of its assets has plummeted so total write downsas a result of the sub-prime crisis have more than doubled to about $37bn (£18.5bn).
This has also de-fenestrated chairman Marcel Ospel , he is slated to be succeeded by Peter Kurer, currently general counsel of the bank and a member of the Executive Board since 2002.
They have also announced the creation of separate unit to manage selected US real estate related positions. They say UBS's intention is "to reduce its exposure in a way that reduces the effect of distressed market conditions on the core businesses " , whilst continuing to provide "the greatest opportunity for shareholders to realize value over time." (Press Release)
We repeat ..." Over the first quarter, UBS's exposure to US residential sub-prime mortgage related positions declined to approximately USD 15 billion from USD 27.6 billion on 31 December, and the exposure to Alt-A positions was reduced from USD 26.6 billion to approximately USD 16 billion."
What are HBOS / RBS / Barclays / Lloyds etc ., hiding away ?
Main capital write downs in last 9 months
Merrill Lynch: $22bn
Morgan Stanley: $9.4bn
Deutsche Bank: $7.1bn
Bank of America: $5.3bn
Bear Stearns: $3.2bn
JP Morgan Chase: $3.2bn
Royal Bank of Scotland: $2.6bn